Stocks rebounded on Tuesday, led by gains in Advanced Micro Devices
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Moving markets, AMD saw shares rose on Tuesday after announcing a new multi-year deal with Meta Platforms
Jefferies analyst Brent Thill saw IBM's sell off on Monday, which saw the business solutions company fall over 10% after start-up Anthropic unveiled an AI solution to modernize COBOL-based infrastructure, as more of a near-term shock than a long-term threat.
"We view the sell-off as a near-term sentiment overhang on legacy services rather than an existential or structural risk," Thill wrote in a late Monday note to clients.
Moreover, Piper Sandler analysts led by Billy Fitzsimmons and Rob Owens wrote in a note to clients that Anthropic's Claude Cowork event on Monday did little to increase disruption fears for the tech industry, positioning the company's Claude AI tool as an "orchestration layer" for businesses rather than a replacement for other tools.
"We believe the notion that Anthropic is looking to enhance the capabilities of most software tools rather than disrupt came as a positive for our names," the analysts wrote.
Still, the threat of AI disruption continues to raise caution. Federal Reserve Governor Lisa Cook said Tuesday that AI could cause an increase in unemployment that monetary policy could not support.
"If AI continues to raise productivity, economic growth could remain strong, even as churn in the labor market leads to an increase in unemployment," Cook said in a speech before the National Association for Business Economics on Tuesday. "In a productivity boom such as this, a rise in unemployment may not indicate increased slack. As such, our normal demand-side monetary policy may not be able to ameliorate an AI-caused unemployment spell without also increasing inflationary pressure."
On the economic front, consumer confidence rose in February, the Conference Board reported on Tuesday, as outlooks for the labor market improved slightly. The board's headline index rose by 2.2 points from January's upwardly revised print to 91.2, coming in ahead of economist expectations.
"Consumers' write-in responses on factors affecting the economy continued to skew towards pessimism," said Dana Peterson, chief economist at the Conference Board, in a statement. "Comments about prices, inflation, and the cost of goods remained at the top of consumer's mind. Mentions of trade and politics also increased in February. Labor market mentions eased a bit in February, while observations about immigration increased somewhat."
Looking ahead, market participants are gearing up for Nvidia's
